- Friday, 06 March 2020
Millennials are wired differently from us Gen X and Baby Boomers.Read more...
- Thursday, 05 March 2020
We will soon know if higher and top rate pensions savings tax relief is cut in the Budget. The Treasury says this would save £10bn per year and justify it on the grounds of fairness. This justification is flawed.Read more...
- Wednesday, 26 February 2020
It is human nature that when we are asked to give an opinion or to answer a question that what we say in response has positive connotations, that is we want to be able to help and where possible give good news, writes Certified Financial Planner and Chartered Wealth Manager John Rook.Read more...
- Friday, 04 October 2019
In a landmark ruling, the High Court has dismissed the claim brought on behalf of 3.6 million women whose state pension age has been increased sharply, often without their knowledge, writes former Pensions Minister Ros Altmann.
The judges ruled that the Government was correcting a past inequality against men, rather than discriminating against women, and was entitled to change pension ages at short notice and without due warnings.
This may not be discrimination, but it has caused real hardship
It was always going to be difficult to prove that a policy intended to equalise men and women's pension age was discriminatory. But many of those affected are suffering real hardship because successive Governments failed to properly inform women of the original 1995 Act changes, so they were expecting their State Pension at age 60 and had inadequate chances to prepare. That is perhaps more like maladministration than discrimination.
Equalising pension age, does not deliver equal pensions
They may start their State Pension at the same age, but this is far from pension equality as women generally have much worse pensions than men. Not only do older women have lower State Pensions, those in their early 60s are estimated to have just one third of the private pension wealth of men too.
Women lose out in pensions due to social norms and past disadvantage
Social norms caused women to lose out in pensions throughout their lives. When they were younger, they were often excluded from occupational schemes, were paid less than men and had to take time out for childcare. That meant their lifetime incomes are lower than men's and the increase in divorce rates also means women have lost the husband's pension they might previously have relied on.
State pensions are a state benefit, not a property right
The High Court concluded that Government can change State Pension rules, with Parliamentary approval, just as it can change other National Insurance benefits. Adjustments to social policy and controlling benefit expenditure are valid policy decisions. Of course, with an ageing population, rising longevity and pay-as-you-go pensions, the Government needs to control state pension costs, to protect younger generations of taxpayers.
Increasing State Pension age saved huge sums to Exchequer
Estimates suggest the rise in women's State Pension age between 2010 and 2016 saved over £5billion in public spending. There is a three-fold benefit for the Treasury. Firstly, not paying their pensions. Secondly, higher tax and national insurance receipts as women keep working while waiting for their State Pension. Thirdly, the additional should boost the economy.
But rising State Pension ages have increased poverty
Many of the women waiting longer for their state pension have been pushed into poverty. Research from the Institute for Fiscal Studies found one in five women aged 60-62 were in income poverty when their state pension age was increased to 63 by 2016. The study showed that men have been affected by rising poverty too, as the starting age for receipt of means-tested Pension Credit has increased in line with rising women's state pension ages.
Governments failed to properly inform people about their state pension age rising
Obviously, policy changes of such magnitude need to be communicated well in advance, so the women are given time to prepare for delays in starting pension receipt. Unfortunately, as the BackTo60 and WASPI campaigns highlight, the failure to communicate clearly and effectively has caused real problems for many of the women affected.
Baroness Ros Altmann is a Conservative peer and former Minister of State for Pensions and Child Maintenance